Consortium plans Papua New Guinea LNG plant

Santos Ltd. has joined a consortium of ExxonMobil Corp., Oil Search Ltd., and Nippon Oil in planning a 5-6.5 million tonne/year gas liquefaction plant in Papua New Guinea.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Apr. 11 -- Santos Ltd. has joined a consortium of ExxonMobil Corp., Oil Search Ltd., and Nippon Oil in planning a 5-6.5 million tonne/year gas liquefaction plant in Papua New Guinea.

In joining the consortium, Santos signed a cost-sharing agreement to carry out a preliminary front-end engineering and design study for the stand-alone LNG plant that would rely primarily on gas feedstock from Hides field in the central highlands.

The $60 million pre-FEED phase, to be completed by yearend, will evaluate the technical and commercial merits of establishing the LNG facility, planned to come on stream by 2012-13.

The study also will determine the best development concept, select a preferred site—likely to be on the Papuan Gulf coast—determine the best field configuration and unitization framework, and examine fiscal terms with the Papua New Guinea government.

Although Hides would be the primary gas supply, additional feedstock could come from nearby Angore and Juha fields (OGJ Online, Apr. 3, 2007).

Santos agreed to buy FEED data previously undertaken for the upstream part of the now-defunct Papua New Guniea gas pipeline to Queensland and to reimburse ExxonMobil for a proportionate share of costs already incurred for LNG studies.

ExxonMobil, which holds 49% interest, will operate the plant. Oil Search will have a 32% interest, Santos 17%, and Nippon Oil 2%.

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